Saudi Arabia has approved the geographic zones where non-Saudis may own real estate, turning the new foreign ownership law into a defined zoning framework. The decision opens selected areas in Riyadh, Jeddah, Makkah, Madinah, AlUla, and major planned developments while keeping ownership subject to location-specific limits and conditions.
Where foreign ownership will be allowed
The Cabinet decision was chaired by King Salman bin Abdulaziz and announced through the Real Estate General Authority. It gives practical effect to the Law of Real Estate Ownership by Non-Saudis, which entered into force in January but had not previously defined the specific ownership boundaries.
The approved zones are concentrated around major development areas rather than entire cities.
In Riyadh, the zones include:
- Qiddiya
- New Murabba
- Sports Boulevard
- Arts District
- Diriyah Gate
- King Salman Park
- Sidra
- King Abdullah Financial District
- King Salman International Airport
In Jeddah, the approved areas cover the city center and 55 separate development areas across the governorate.
In Makkah and Madinah, foreign ownership is permitted only for Muslims, whether resident in Saudi Arabia or abroad, as well as licensed Saudi companies and capital markets vehicles.
Approved sites include:
- Makkah: Abraj Makkah, Jabal Omar, King Salman Gate
- Madinah: Downtown Madinah, Diyar Al-Maqar
Other approved areas include AlUla and planned urban mega-projects such as NEOM, Amaala, and the Red Sea project.
From discretionary approvals to zoning
For most of Saudi Arabia’s modern history, foreign property ownership was limited and handled as an exception. A 2000 law allowed foreign acquisitions on a case-by-case basis, subject to regulator discretion.
The new system replaces that discretionary model with a zone-based framework. Non-Saudis may own property or in-rem rights only inside areas designated by the Council of Ministers. Maximum ownership shares and usufruct terms are to be set zone by zone.
The law existed for about five months without an operative map. The Cabinet decision now provides that map.
The framework also includes a transfer fee of up to 5% on non-Saudi disposals, in addition to the existing 5% real estate transfer tax.
Commerce Minister Majid Al-Qasabi described the regulations as a catalyst for business expansion and competitiveness. Investment Minister Fahd bin Abduljalil Al-Seif framed the zones as a way to define ownership boundaries, property rights, obligations, and pathways for use, giving foreign firms a clearer basis for headquarters and long-term investment decisions.
A phased opening of the market
The designated-zone approach is presented as a measured liberalization rather than a full opening of the national property market.
Güvenç Ketenci, CEO of Ketenci & Ketenci, described the approach as “intentionally measured rather than restrictive,” saying it allows regulators to monitor transaction volumes, pricing dynamics, compliance standards, and foreign participation before considering wider liberalization.
He compared the strategy with other countries that opened selected areas first, assessed market response, and then expanded gradually if results were positive.
Demand, liquidity, and buyer considerations
The selected zones may not automatically satisfy foreign demand. Riyadh and Jeddah are viewed as the strongest candidates because they combine economic growth, expatriate communities, multinational employers, and large-scale development.
The inclusion of Makkah and Madinah projects may also be significant for Muslim investors, who may treat ownership in the holy cities as both a lifestyle decision and a long-term wealth-preservation choice.
However, the zone list is only one factor. Buyers still need to assess:
- rental demand;
- liquidity;
- exit options;
- developer quality;
- legal certainty;
- financing availability;
- transaction efficiency;
- registration transparency;
- dispute resolution;
- consistency of rule enforcement.
Legal permission to buy property is therefore only part of the investment case.
Link to Premium Residency
Until now, the main route for a foreigner to own Saudi property outright has been through the Premium Residency program, the Kingdom’s investor residency route launched in 2019.
The program drew more than 40,000 applications between January 2024 and July 2025, following broadened eligibility criteria.
The new zones are not expected to cause an immediate spike in Premium Residency applications, but they may reinforce the broader shift toward longer-term foreign settlement and investment. Property ownership can make residency feel more permanent than status alone.
Position within the GCC
The new rules do not necessarily position Saudi Arabia as a replacement for Dubai or other established GCC hubs. Instead, Saudi Arabia is framed as a complementary destination within broader regional investment strategies.
Its advantages include:
- the scale of its domestic economy;
- the long-term Vision 2030 agenda;
- substantial infrastructure investment;
- policy continuity over recent years.
The key test will be how the system performs after transactions begin: whether deals close efficiently, registration is transparent, disputes are resolved reliably, and rules are applied consistently.
Saudi Arabia’s real estate market is projected by the Real Estate General Authority to grow from about $75 billion in annual transaction value in 2025 to $101.6 billion by 2029, equivalent to roughly 8% annual growth. The new ownership map gives foreign capital a defined legal path into that market for the first time.
Source article: www.imidaily.com
